Capitec Bank’s annual remuneration report for 2023 was released on April 18, detailing the earnings of its top executives for the previous financial year.
Despite the challenging economic climate in South Africa, Capitec’s financial results for the full year ending February 28, 2023, showed strong growth.
Headline earnings saw an impressive increase of 15% to R9.7 billion compared to R8.4 billion in the previous year. Income from operations also grew by a solid 12% to R30.3 billion, with net income showing a marginal increase of 2% to R24 billion. However, credit impairments increased by a staggering 80% to R6.3 billion, contributing to the reduction in income.
Capitec declared a final dividend of 2,800 cents which brought the total dividend for the year up to 4,200 cents – reflecting a noteworthy increase of 15%, aligning with the group’s growth trajectory. The bank’s client base also saw significant growth with over twenty million customers recorded at the end of February in that same year alone; meaning approximately one-third of South Africa’s population (estimated at sixty million people) now banks with Capitec in some form.
Credit Impairments and Reasons for Increase
Capitec attributed this growth in credit impairment charge as an outcome of events that occurred across four years; starting from ‘normal’ conditions in twenty-twenty and then being heavily disrupted by pandemic-related turmoil throughout twenty-twenty-one followed by some recovery during twenty-twenty-two and then again disrupted due to Russian-Ukrainian conflict during twenty-twenty-three.
The group’s CET1 ratio remained high at thirty-four percent (compared to thirty-five percent previously) and CAR ratio was also steady at thirty-four percent (compared to thirty-six percent previously). These ratios are well above regulatory requirements approved by Capitec’s board indicating that they remain well-capitalized and positioned for future growth opportunities.
Executive Salaries
Regarding executive pay, Capitec’s single-figure report revealed that CEO Gerrie Fourie’s pay for 2023 amounted to R62.09 million – representing a 33% decrease from the R92.77 million he received in 2022. This includes his total guaranteed pay (TGP) of R16.92 million, benefits, and a short-term cash incentive (STI) of R5.42 million as well as a long-term incentive (including vested awards) of R39.74 million. Fourie’s salary translates to an estimated earnings of around R170,109 per day – quite an impressive number indeed!
Capitec’s Chief Financial Officer, Andre du Plessis, received a total of R31.05 million for the year, which represents a significant 48.5% decrease from the R60.35 million he received in 2022. This reduction is mainly due to his not receiving an STI after retiring on June 30th, 2022.
Out of Capitec’s top four executives, Grant Hardy received the smallest amount at R6.97 million. He was appointed as CFO on July 1st, 2022; therefore, his STI and TGP were pro-rated based on the number of months he served as CFO within the financial year.
Collectively, all four executives earned a total of R114.59 million in salaries throughout the year with an average salary of about R28.64 million per executive.
According to Capitec’s reported numbers for staff costs in 2023, they spent around R6.2 billion on salaries and benefits for their employees consisting of15,451 people which translates to an average cost per employee of about R401269.
The CEO earned approximately 154 times more than the average employee while each executive earned around 71 times more than an average employee as shown in the table below outlining their compensation packages.